Paying more than minimum on revolving accounts will help mortgage loan approval
Effective June 25, Fannie Mae will start evaluating how all loan applicants have managed their credit over the previous two years: how much they owed in revolving debt each month, the minimum payment allowed on each debt, and how much they actually paid. “Transactors”, consumers who pay off their revolving accounts monthly or pay more than the minimum payment, are a better risk than “Revolvers” who only pay the minimum payment on their revolving accounts.
Paying more than the minimum on revolving accounts or paying them off each month will improve the chances of loan approval through Fannie Mae’s automated underwriting system and may also help first time buyers generate an acceptable credit score for mortgage qualifying.
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